Biyani trains guns on small-town youth with new fashion range

Biyani’s Future Group is back in the lifestyle market with casual western wear for the youth primarily in tier 2 and tier 3 cities.

NEW DELHI: After capturing a share of wallets of urban Indian households, top retail entrepreneur Kishore Biyani has now trained his sights on youngsters who constitute almost half of the country's 1.2-billion population. Less than a year after selling Pantaloons department store chain to AV Birla Group, Biyani's Future Group is back in the lifestyle market with a smaller format of casual western wear for the youth primarily in tier 2 and tier 3 cities.

"This is a format for a different market and an area where we are currently not present in," Biyani told ET. He said his company would experiment with a pilot project of the new format before taking a call on its expansions. "We will learn from it and then expand," he said in a telephonic interview. He declined to reveal the name of the new format. Experts feel the move will pay off because there is a growing market for western wear in smaller towns.

"It will definitely be an opportunity," said Abhishek Ranganathan, vice president at brokerage firm PhillipCapital, who tracks the Future Group's listed entity Pantaloon Retail (India) Ltd. "In the metros consumers generally migrate from one brand to other, but there is a growing shift towards the western wear category taking place in tier 2 and 3 cities," he said. The new format will be part of the newly carved Future Lifestyle Fashion and will primarily sell its own merchandise, independent of Future Group's existing private labels Fashion at Big Bazaar and Jealous 21 or any other brand.

Future Lifestyle Fashion was formed last year out of Pantaloon Retail (India) by clubbing the group's fashion portfolios. Biyani plans to list Future Lifestyle as a separate entity. Last May, consolidated debt in excess of Rs 7,000 crore made Biyani sell Pantaloons departmental chain — which had 65 stores nationwide and contributed 10-15% to the group's overall Rs 11,000 crore in sales — to A V Birla group for Rs 1,600 crore, including debt.

Future Group followed it up by divesting its 53.67% stake in financial services firm Future Capital Holdings to private equity firm Warburg Pincus for Rs 560 crore in June. These two deals helped Future Group to pare its debt to manageable levels. Ranganathan of PhillipCapital estimates the group will cut its debt by about Rs 2,000 crore after the deals, helping to considerably improve its debt to equity ratio from 1.3 debt to every equity before the deals.